Transcript Chapter 7
Chapter 7 Urbanization and Rural-Urban Migration: Theory and Policy Copyright © 2009 Pearson Addison-Wesley. All rights reserved. The Migration and Urbanization Dilemma • Urbanization: trends and projections Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-2 Figure 7.1 Urbanization and Per Capital Income in Selected Countries Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-3 Figure 7.2 Urbanization across Time and Income Levels Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-4 Figure 7.3 Proportion of Urban Population by Region, 1950-2030 Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-5 Figure 7.4 Megacities: Cities with Ten Million or More Inhabitants Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-6 Figure 7.5 Estimated and Projected Urban and Rural Population of the More and Less Developed Regions, 1950-2030 Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-7 Figure 7.6 Annual Growth of Urban and Slum Populations, 1990-2001 Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-8 The Role of Cities • Agglomeration economies, Urbanization economies, Localization economies • Industrial districts • Efficient urban scale Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-9 The Urban Giantism Problem • First- city bias • Causes of Urban Giantism Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-10 Table 7.1 Population of the Largest and Second-Largest Cities in Selected Countries (millions) Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-11 Figure 7.6 Annual Growth of Urban and Slum Populations, 1990-2001 Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-12 The Urban Informal Sector • Importance of the informal sector in developing economies • Policies for the Urban Informal Sector • Women in the Informal Sector Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-13 Figure 7.8 Importance of Informal Employment in Selected Cities Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-14 Figure 7.9 Youth Unemployment Rates, 1995 and 2005 Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-15 Migration and Development • Rural-to-urban migration was viewed positively until recently • The current view is that this migration is greater than the urban areas’ abilities to – Create jobs – Provide social services Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-16 Figure 7.10 Components of Migration in Selected Countries Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-17 Toward an Economic Theory of Rural-Urban Migration • A verbal description of the Todaro model – Migration is a rational decision – The decision depends on expected rather than actual wage differentials – The probability of obtaining a city job is inversely related to the urban unemployment rate – High rates of migration are outcomes of rural urban imbalances • A Diagrammatic Presentation Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-18 Figure 7.11 Schematic Framework for Analyzing the Rural-to-Urban Migration Decision Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-19 Figure 7.12 The Harris-Todaro Migration Model Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-20 Toward an Economic Theory of Rural-Urban Migration WA LM (W M ) L US Where WA is agricultural income, LM is employment in manufacturing LUS is total urban labor pool WM is the urban minimum wage Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-21 Toward an Economic Theory of Rural-Urban Migration • Five Policy Implications – Reduction of urban bias – Imbalances in expected income opportunities is crucial – Indiscriminate educational expansion fosters increased migration and unemployment – Wage subsidies and scarcity factor pricing can be counterproductive – Programs of integrated rural development should be encouraged Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-22 A Comprehensive Migration and Employment Strategy • • • • • Create a urban-rural balance Expand small, labor intensive industries Eliminate factor-price distortion Choose appropriate technologies Modify the linkage between education and employment • Reduce population growth • Decentralize authority Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-23 Case Study: India Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-24 Case Study: Botswana Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-25 Concepts for Review • Agglomeration externalities • Present value • Congestion • Social capital • Efficiency wage • Todaro migration model • Expected income • Urban bias • Induced migration • Urbanization economies • Informal sector • Wage subsidy • Rural-urban migration • Labor turnover • Localization economies Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 7-26